Iraq: Weighing the costs & benefits

About the Author

Is the war in Iraq worth it? Skeptics are confident the answer
is no, and some are quantifying their certainty by translating the
war into dollar terms. Direct costs so far exceed a quarter billion
dollars, five times higher than the early rosy estimates of some
White House officials, and that's before adding intangibles.

In a recent academic paper, Nobel-prize winning economist Joseph
Stiglitz and Harvard University budget expert Linda Bilmes suggest
the total "Economic Costs of the Iraq War" will be between $1
trillion and $2 trillion. But anyone who takes a close look can see
that their paper isn't much more than a one-sided anti-war lecture,
loaded with incessant negativity, inflammatory language and glib
suggestions of military incompetence. The authors patronizingly
admonish policymakers to "undertake a cost benefit analysis before
undertaking any project -- especially one with as significant
consequences as war" (their italics). This makes for impressive
hubris in a paper which, either hypocritically or naively,
considers costs alone.

When I confronted Stiglitz about ignoring the potential benefits of
the Iraq war during a BBC debate, he countered that the paper is
merely the first in a conversation, hinting that assessing benefits
is more difficult. Yet his paper makes no such hedges, concluding
bluntly, "Expenditures on the Iraq war have no benefits [for
America]."

Elsewhere, they claim that the only clear beneficiaries of the war
are "oil companies" and "certain defense contractors." No mention
of the Kurds or the Shiites. No mention of the widespread winds of
change in Libya, Lebanon, Syria, Egypt and Saudi Arabia.

This is willful ignorance, not the "cool, hard analysis of the
kind for which economics has long earned a reputation" that the
authors pretend.

Stiglitz and Bilmes insist that carefully assessing benefits is
important, then proceed to simply assert that American troops hurt
our foreign relations. A few years ago, a colleague (Professor
Garett Jones) and I decided to take that question seriously and
began to investigate whether the presence of U.S. troops enhanced
growth rates in host countries during the last half-century. Our
preliminary research suggests it did -- and strongly. We suspect
that the active American security umbrella enhances investment. At
the very least, the facts are contrary to the thesis of imperial
domination.

As for costs suggested in the paper, much of the $2 trillion cost
estimate is speculation about lost opportunities, not an actual
burden on American taxpayers. It is a number based largely on
intangible opportunity costs and assumptions of global
macroeconomic and diplomatic damage. Everyone agrees that a
soldier's sacrifice implies a life unfulfilled, but Stiglitz should
be called on his heartless assumption that our soldiers create zero
benefits.

Moreover, the Stiglitz-Bilmes framework implies that Americans
shouldn't have fought in Bosnia, Vietnam, Korea or the two World
Wars. And forget about stationing 250,000 troops annually in West
Germany during the Cold War. Too expensive.

The hard fact is that more American troops died in one day on one
beach during 1944 than during the entire Iraq war to date. The cost
of Normandy was far higher in blood than the cost of Baghdad, yet
who would attribute a value of zero to the liberation of France or
the Nazi death camps? Or attach no value to the freedom of 49
million South Koreans?

To paraphrase John Stuart Mill: War is an expensive thing, but not
the most expensive of things. A man unwilling to pay any price for
the well-being of others is a sad creature indeed.

Tyrannical states such as the Hussein regime tax the human spirit,
destroy potential prosperity and spawn terror. Allowing failed
states to fester isn't cheap. And now we know: Regime change isn't
cheap either. But if history is any guide, the returns on sending
American soldiers to the Middle East will be positive.

Tim
Kane(Tim.Kane@heritage.org
) is an economist and Bradley Fellow in the Center for Data
Analysis at the Heritage Foundation, and a veteran Air Force
officer.